It perfectly suits the US that India rather than China is developing the Iranian port. Hence, the sanctions waiver for Chabahar

Two days before the crucial talks took place in Moscow to find ways to end the unending civil war in Afghanistan, the US government announced a waiver to its sanctions on Indian investments in Iran’s oceanic port, Chabahar.

The informed view was that the unusual waiver that US administration gave to the Iranian port was due to the aggressive lobbying by India to save its investments and persevere with its newly crafted policy to connect with Afghanistan and Central Asia. According to this view, the government and businesses in Kabul too lobbied for Indian access, as they view in Chabahar an opportunity to liberate themselves from the control that Pakistan and its Karachi port exercises on their movement and their businesses. But this is not all. Apparently, the US, has its own reasons to grant this waiver.

India signed a trilateral connectivity deal in May 2016 with Iran and Afghanistan that allows it to bypass Pakistan and reach Europe and Central Asia. The hub of this connectivity agreement is the Chabahar Port, whose management was given to India for 18 months.

Chabahar harbour is located on the semi-desert Makran Coast of Iran, which represents the shortest route for Afghanistan to the sea. For Afghan traders it is 700 km shorter than Iran’s Bandar Abbas port and 1,000 km closer than the Pakistan’s port of Karachi. Chabahar is also 750 nautical miles from Karachi. A back of the envelope calculation shows that the Afghan businessmen will save 50 per cent of their shipping costs when they use Chabahar.

Quite expectedly, there are 165 Afghan companies, out of the total number of 500 companies, that are registered by the Chabahar Free Zone authority. So enthused are the Afghans after the the US waiver to this port that they are planning to launch their own shipping line that will fly their national flag. This Afghan ships will ply between Indian ports and Chabahar.

A waiver to this Iranian port by the US administration may be claimed as a vindication of Iran President Hassan Rouhani’s determination to give the development of this port to India, and not to China. If the Iranian President had been swayed by the media criticism within and outside about the tardy pace of the port’s progress, aggravated by an ambivalent and uncertain India, and handed it over to Beijing, then there was little likelihood that it would have seen US’s benevolence.

A waiver of the port gives the Iranian government more options to deal with the stringent sanctions that have been imposed by the US government after it withdrew from the P5+1 nuclear deal. However, it is not clear how India will work with Iranian companies that are already in the sanction list of US. Some of these Iranian companies in Chabahar are managed by Islamic Revolutionary Guards that are being accused of spreading terror in West Asia.

Long before the US government decided to give India a waiver on its investments on Chabahar, External Affairs Minister Sushma Swaraj, in her 2+2 meeting with US officials, had made it clear that New Delhi only recognised UN sanctions and not bilateral ones between nations. Though the Indian government was facing major banking hurdles in funding its infrastructural works, it was trying to explore with Tehran a rupee-riyal arrangement to hasten the port’s progress as well pay for its oil purchases.

It was also conscious of the fact that the US sanctions would prevent the use of Brussels-based SWIFT communication systems, which allows inter-bank transfer of funds. Hence it was exploring whether it could become part of the special purpose vehicle that the EU was creating to deal with Iran that allowed trading in euros, yuan and rouble. It was obvious to Washington that its decision could not just drive its strategic ally in the waiting arms of its enemies like Russia and Iran, but it could also limit its strategic choices in Afghanistan where it has a large military presence.

Wheat consignment

Last year when US Secretary of State Rex Tillorson visited New Delhi, he had made it clear that there would not be any interference in India’s business relations with Iran. A week later, India asked the then Iranian Ambassador to India whether it would be possible for Foreign Minister Zarif to flag off the wheat consignment to Afghanistan through Chabahar. Everyone was taken by surprise by the Indian decision to activate its trilateral connectivity that it had signed to bypass Pakistan and reach Afghanistan and Central Asia directly.

There were some suggestions quietly discussed in the strategic community about how the consignment was sent at the behest of the US to Afghanistan. Was there anything more than the wheat destined for the Afghans?

Nothing would be known, but what is clear is that the US and its allies could use its strategic location when situation spins out of control in the land locked South Asian country.

The recent Moscow-format meeting and subsequent developments in Afghanistan paint a grim reality where the US forces would have to either escalate their presence or get out. For the first time, the Taliban representatives were present in a conference where 12 nations including the US and an “ unofficial” India participated.

The meeting triggered violence in peaceful areas of Afghanistan like Jaghori and Malistan. Russia, which organised the Moscow meet, claimed that it had to step in to bring peace in Afghanistan as the US had failed. Russian President Putin’s ambassador for Afghanistan, Zamir Kabulov, claimed that the Taliban was willing to return to the negotiating table if they were given a timetable for US troop withdrawal.

This suggestion has created anxiety in President Ghani’s establishment and also in some quarters in India who fear that the gains on human rights, media freedom, women education and empowerment would go up in smoke once the Taliban return to power. The demonstrations in Kabul by residents of Jaghori and Malistan demanding protection from the administration indicate the unease amongst those who benefited from the US-overseen government in Afghanistan.

If guarantees for their safety do not follow Taliban talks, then these people plus the US troops could flee — not through a hostile Pakistan, but through this Iran port.